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Sunday, December 29, 2013

My best wishes to all my readers for a very successful 2014 - I hope you can help at least one person every day for 365 days in whatever way you can.

2013 was a reasonably good year from investing stand point even
though my predictions of Dec 2012 went wrong.I did not expect slowing down of the Indian economy and the resultant
devaluation of the Indian Rupee. I had also expected the interest rates to come
down and stock markets to do well. However, as I invest on specific stocks for
the long term, my investments in 2013 have not been effected by my wrong
forecast. Here are my 2013 stock
investments:

Beyond these stock market investments - I also sold one flat in Bannerghata road in Bangalore
and invested in a row house in Kengeri in Bangalore - I expect this investment to grow well in asset
value over the next 5-10 years.

My 2014 predictions
are based on the following scenario –

May 2014 elections – a stable government is what everyone is
hoping for. But with BJP, Cong and AAP in the reckoning – I am not sure if we
can get a stable government. A split mandate could mean bad news for the
industry and for the stock markets.

I do not expect too great an year from that stand point. I
expect the RBI to be under pressure to manage the economy as government policy
would be weak. Interest rates would be kept high to control inflation. Fiscal
deficit would be a concern and a rating downgrade would keep the RBI on the toes.
Rupee devaluation would be a concern – we have seen a 11% devaluation in 2013 –
I expect a similar devaluation and high inflation in 2014 if we have a fractured
mandate.

I expect the US, Europe and Japan economies to improve
further. This has good implications for our exports and the exporters in India
would do well (IT and Pharma sector). This
also would keep global Gold Prices in USD under pressure as global investors
would continue to flock to stocks rather than commodities like Gold.

In such a situation
where would I invest?

For short term for 0-6
months– I recommend Liquid funds –that would give about 7-8% surely.

For 6-24 months – I would
recommend FMP’s – they also should give 9-10% returns.

For 24 months and above –
stock market is surely a good option still. There will be companies that
will do well and one needs to cherry pick the stocks - in case you want,
please write to me – I have a Private Equity mailing list where I share
my stock activities and you can also get that information.

For 60 months plus – Urban real estate is still a good option. There is a bit of overheating
in the real estate market -so one needs to be careful. However, there
are many ideas for investing in this space in every urban area in the
country. My knowledge is limited to Bangalore and in case you want to
invest in Bangalore and need some help- please do write to me

Gold –I do not expect a
great return this year. The global price of Gold in USD would be under
pressure -it is currently holding at $1200 per ounce – I do not expect it
to go below this. The Rupee/US
Dollar rate is currently around 62 – I expect it to be around Rs. 67-68 by
2014 end - an 8-10% devaluation (based on Indian inflation of 10% and US
inflation of 2%) – that means Gold in Indian Rupee will give around 8-10%
returns – that is the same as inflation in India. So investing in Gold in
2014 may not be a good idea – if you already have gold – then you would
get around 10% returns (which means you have survived the inflation)

The key message is that in 2014, we can get a decent 15%
plus ROI per annum on long term investments and appx 8-10% post tax per annum on
short term investments. That is enough to “GET RICH AND RETIRE EARLY”.

Tuesday, December 17, 2013

Hennur Road in North Bangalore has seen a lot of real estate
activity in the past 3-4 years. The new Bangalore Airport and the promise of many
tech parks and other industries in the vicinity has triggered the demand for
residential spaces in and around Hennur road. This road also serves as an
alternate route to Bangalore airport for people travelling from the outer ring
road area. It is a four lane road and is already chocked with traffic on any
normal day. All well known builders in Bangalore, including Mantri, Shobha,
Prestige, Brigade have launched projects in this locality. Apartment prices are
around Rs. 4000 to 6000 per sq ft.Land
rates depend on the exact location – but typical land rates are around Rs. 4000
psft to 7000 psft.

A group of High Net-worth Individual investors are looking
at investing in a 7 acres piece of land off Hennur road - this land is owned
for about 4 decades by an erstwhile royal family and the price negotiated is
just below 2000 psft.This land piece is
also literally on the proposed Peripheral Ring Road –this proposed road will in
fact take a small portion of the land –the work on this road will happen in the
next two years. Needless to say that this
road will increase the value of the property tremendously.

This investor group is looking at procuring the land and
then getting into a JV with a builder to build residential villas or apartments
and exit the investment with the sale of
the built up property. The time frame of investment is appx 5-6 years and I
expect the investment to give 250-300% ROI during this period.

I have personally visited this land and I am convinced of
the viability of this proposal. The risks in this scheme are the following:

·the delay in signing the JV with a developer; or

·the delay by the JV partner to deliver the
project; or

·delay in selling the project and exiting it.

The minimum investment for participating in this Rs 30 lacs –
as this investment is for buying the 7 acres of land – you will need to invest
this money by Jan end. So if you have this liquidity and have a 5 year time
holding power - I would surely recommend this investment.

If you are interested and want more details or want to visit
the site and meet the key investor, please reach out to me at rajasekharan.sg@gmail.com(Ph +91 98452 63000)

Saturday, December 14, 2013

Year end is a good time to introspect and plan. At this time of the year, most of us make New Year
resolutions. I am sure one of your New Year
resolutions would be to do well financially in the coming year.

So here are some thoughts on “How to become a smarter
investor in 2014”.

Visualise Financial freedom - We all agree that achieving
financial freedom can change our lives. So visualise your life once you are financially free. What will you do from 6 am till 10 pm?How you will spend seven days a week when you
are financially free? What are the projects that you will pursue once you
do not need a job to live your life? I want you to list all the things that
you have always wanted to do - but did not do due to time and money constraints. Visualising
how your life will change once you achieve financial freedom is really the first step towards becoming a better investor.

What do you invest your time on? The rich people continually
invest their time in educating themselves to become better investors. They
invest time and effort in getting clarity in their mind on their long term
goals – over time, they know exactly what they want. They put time and
effort in building networks with like minded people. It is this financial education, clarity of
mind and networks that make them rich over time. So these are the
three areas where you will need to work on.

Getting rich is not magic or luck – it is 10 year
project. Anyone can become rich. All it needs is to break this large 10 year
project to 10 smaller yearly projects. Take one
project every year and just do it.Over time you will reach your goal of financial freedom. So while
the world may think that you are lucky – you know that you have worked for
it – you know that you have invested your time and effort and
over time reached the goal of financial freedom.

Where do I start?Here's what you need to do:

If you have not done it
already – start by visualising how your life will change once you are
financially free –this is required to motivate oneself over the
next few years to sacrifice your today for a better tomorrow.

Make a long term
financial plan – I have a 20 year financial planning template that I can
share.It is explained in detail
in the book. With the help of the book and the template, you can make a GET
RICH PLAN for yourself.

Commit two hours every
week for improving your financial education, clarity of mind and networks
-these are the things that will
make you rich over time.

Break the long term plan to annual plans and take one step at a time -measure the current ROI on your investments
and work towards increasing your ROI over 2-3 years to 15% per annum (post
tax)

Over 3-5 years, you will
see that you are a smarter investor and you can clearly see that you are
getting closer to financial freedom every year.

Remember life is a
vacation once you achieve financial freedom – all seven days a week you
are on vacation. You can chose to do
what you want and refuse what you do not want.